Bitcoin gives up three-week high on profit-taking
Bitcoin fell on Tuesday away from three-week highs amid active profit-taking.
The losses are stymied by the current decline in US 10-year treasury yields as traders await more evidence on future US interest rate cuts.
The Price
Bitcoin fell 1.3% at Bitstamp today to $65192, with a session-high at $66,338.
On Monday, bitcoin rallied 5.1% at Bitstamp to a three-week high at $66,479 amid hopes for improved demand in China, the world’s second largest crypto market.
Crypto Market Value
The market value of cryptocurrencies fell by $370 billion to a total of $2.370 trillion, as both bitcoin and ethereum lost ground.
US Yields
US 10-year treasury yields fell 1.5% away from three-month highs at 4.142%, in turn boosting risk appetite.
Federal Reserve official Christopher Waller called for more caution about cutting interest rates in the future, basing that on recent US data.
Following the remarks, the odds of a 0.25% Fed rate cut in November dipped slightly to 85%, while the odds of maintaining rates unchanged rose to 15%.
US dollar gives up two-month high on profit-taking
The US dollar fell in European trade on Tuesday against a basket of major rivals, away from two-month highs, and about to mark the first loss in six days amid profit-taking.
Losses are curbed by the receding odds of a Federal Reserve interest rate cut in November following aggressive remarks from Fed official Christopher Waller.
The Index
The dollar index fell 0.2% today to 103.04, with a session-high at 103.35.
The index closed up 0.3%% on Monday, the fifth profit in a row, and marked a two-month high at 103.36.
Waller
Federal Reserve official Christopher Waller called for more caution about cutting interest rates in the future, basing that on recent US data.
Waller also warned that recent hurricanes and the Boeing strike could make labor readings difficult, and could snap 100,000 new jobs of the next payrolls report for October.
Following the remarks, the odds of a 0.25% Fed rate cut in November dipped slightly to 85%, while the odds of maintaining rates unchanged rose to 15%.
Gold backs off two-week high as the dollar strengthens
Gold prices fell in European trade on Tuesday and extended the losses for the second straight session, backing off two-week high on profit-taking while the dollar gained ground against major rivals.
It comes after bullish remarks from Fed official Christopher Waller, which hurt the odds of an interest rate cut in November.
Prices
Gold prices fell 0.4% today to $2638 an ounce, with a session-high at $2655.
On Monday, gold lost 0.3%, the first loss in three days away from two-week highs at $2666.
The Dollar
The dollar index rose 0.15% on Tuesday, maintaining the gains for the sixth straight session and almost touching two-month highs at 103.36.
The gains came after a spate of strong US data and bullish remarks from Fed officials.
Waller
Federal Reserve official Christopher Waller called for more caution about cutting interest rates in the future, basing that on recent US data.
Waller also warned that recent hurricanes and the Boeing strike could make labor readings difficult, and could snap 100,000 new jobs of the next payrolls report for October.
Following the remarks, the odds of a 0.25% Fed rate cut in November dipped slightly to 85%, while the odds of maintaining rates unchanged rose to 15%.
SPDR
Gold holdings at the SPDR Gold Trust rose 2.59 tonnes yesterday to a total of 880.57 tonnes, the highest since late 2023.
Yen about to trade below 150 per dollar
The Japanese yen fell in Asian trade on Tuesday, on track for the third loss in a row against the dollar, while hovering near 2-⅕ month lows, and about to pierce 150 once more amid concerns about the Japan-US interest rate gap.
Bearish remarks from Japanese officials weakened the odds of a third interest rate hike this year, while conversely, the Federal Reserve is expected to continue cutting interest rates in the near term.
The Price
The USD/JPY rose 0.1% to 149.84, with a session-low at 149.44.
The yen lost 0.45% yesterday against the dollar, marking the second loss in a row, and plumbing 2-⅕ month lows at 149.98 as US 10-year treasury yields kept rising.
Japanese Rates
A series of bearish remarks by new Japanese PM Shigeru Ishiba and several BOJ officials reduced the odds of an October interest rate hike by the Bank of Japan, in turn hurting the yen’s standing.
US Rates
Federal Reserve official Christopher Waller called for more caution about cutting interest rates in the future, basing that on recent US data.
Following the remarks, the odds of a 0.25% Fed rate cut in November dipped slightly to 85%, while the odds of maintaining rates unchanged rose to 15%.
Interest Rate Gap
The current Japan-US interest rate gap stands at 475 basis points, the lowest since early 2023, and will likely remain unchanged until the Federal Reserve’s November meeting.